A recent literature suggests that because investment expenditures are irreversible and can be delayed, they may be … aggregate investment. We find that the volatility of the marginal profitability of capital - a summary measure of uncertainty … - affects investment as the theory suggests, but the size of the effect is moderate, and is greatest for developing countries …

In the literature investigating the impact of uncertainty on short-run and long-run investment, most authors have used … general ones and has the advantage of providing closed form solutions for both short-run investment rule and long-run rate of …